A woman works at Stephen Musoke's coffee farm in central Uganda. Nicholas Bariyo/The Wall Street Journal
MITYANA, Uganda—On a gently sloping hill in central Uganda, Stephen Musoke plots the next steps for his 2-acre coffee farm—one of many plantations brought back into production across East Africa after years of neglect as coffee prices have jumped.
This year alone, the price of robusta coffee beans, the cheaper variety used in instant coffees, has increased 17% in London, while the tastier and pricier arabicas have surged by more than 53% on concerns of a global shortfall caused by a historic drought in Brazil, the world's largest grower.
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Higher prices since 2010 have triggered a rush back to the coffee fields of East Africa. The Uganda Coffee Development Authority says farmers have renovated thousands of acres of coffee plantations that had been abandoned. In addition, the state coffee body says, a record 27 million coffee trees have been planted on new, previously uncultivated lands, a nearly 8% increase from the 350 million trees already grown in Uganda, according to UCDA.
The story is repeated across Africa's eastern coffee-growing heartland, including Kenya, Rwanda and Tanzania, according to the African Fine Coffee Association, a regional coffee body.
The resurgence of African production could help restore stability to the global coffee market. Africa used to account for about 30% of the world's coffee-bean production, but the industry slumped in the 1970s during a previous price downturn. That left the world increasingly dependent on the fortunes of the crop in Brazil. The new rise in output from a different part of the world should ensure a steadier supply of beans as demand continues to rise.
"African farmers have a chance to seize this opportunity as the global [coffee] deficit continues to widen," says David Muwonge, deputy executive director at Uganda's national coffee-farmers body, known as Nucafe. "But farmers need more supportto access credit and inputs if they are to realize their full potential."
Mr. Musoke returned to work his farm as coffee prices recovered. Nicholas Bariyo/The Wall Street Journal
Uganda sells coffee beans mainly to Europe, the U.S. and Asia. The major buyers of the standard coffee beans include companies such as Swiss-based Sucafina SA and Olam International Ltd.O32.SG +1.53% , while specialty beans go to companies such as StarbucksCorp. SBUX +0.06% and Nestlé SANESN.VX +0.57% . At least two million Ugandans grow coffee, mostly on small farms.
Mr. Musoke inherited his land in the Mityana district in central Uganda from his father some 15 years ago. The years of low coffee prices drove him out of the business: He decided to leave his farm in 2007 and make a 30-mile journey to the capital city, Kampala, to take a job at a local fruit store. He left the farm under the watch of his relatives, who would once in a while pick the coffee cherries during harvest periods, but yields were poor.
As coffee prices recovered, Mr. Musoke decided to return in 2012. He found the plantation was nearly consumed by weeds and wild bushes, which were competing against the coffee trees for nutrients in soil that was already struggling. He then endured back-to-back poor harvests due to the poor quality of the soil, and global coffee prices slumped again.
But he pressed on. He took out a small loan in 2013 to buy fertilizer, and noticed an immediate difference. The 40-year-old farmer, who once struggled to pay school fees for his four children, earned more from his main harvest this season than he would normally make in two seasons, as yields have improved and prices rose once again.
"The prices have given farmers a pleasant surprise. It's very exciting," Mr. Musoke says with a broad smile.
The coffee beans are just starting to take shape on his trees and, like other farmers in central Uganda, he is optimistic about the next harvest in October.
Coffee output from East Africa is poised to rise about 18% to hit 14.5 million bags during the 2013-14 season and could rise around 15% more next season, aided by acreage expansions and improved crop-husbandry methods, according to the African Fine Coffee Association.
Emanuel Mukasa runs a 1-acre farm in Mpigi, about 30 kilometers (19 miles) west of Kampala. At one stage, as prices remained stubbornly low, Mr. Mukasa considered uprooting all of his coffee trees and switching to crops with a faster turnaround, such as cereals and grains. Now, he says, he plans to double the size of his plantation next season, provided prices remain "good."
But his voice still betrays some doubts. "Coffee prices are very unpredictable," Mr. Mukasa says.
After years of trading below $1 a pound, prices of some varieties of arabica beans began to rise in 2010, and soared well over $2.50 a pound by 2012 as bad weather hit crops in Central America and Asia. They then fell back, to under $1. Now, global prices are back up to $2 a pound on concerns about tight supplies from the Brazilian drought.
But a bumper crop next year in Brazil, or another major coffee producer such as Vietnam, could again push prices lower. It is hard to make the long-term investments needed for coffee trees, which usually take between three and five years to start producing beans.
"Rushing to plant a long-term crop because of misfortunes in another area can be counterproductive," said Andy Kristian Agaba, chief executive of Hiinga Microfinance, a Leola, Pa.-based microfinance firm that provides small loans of roughly $200 to farmers in Africa. "Commodity prices are so volatile that farmers need to diversify and minimize or cover for their risks."
In a bid to ensure they get as high a return as possible, coffee farmers around the world have moved toward developing specialty coffee beans, with stronger or more unique flavors, that can get higher premiums than the low-value coffee berries.
Latin American countries such as Colombia, Ecuador, Guatemala and Mexico have dominated the specialty-coffee markets, accounting for more than 50% of market share.
But African producers aren't sitting back. Over the past five years, East African producers, with assistance from buyers such as Starbucks, ED&F Man Holdings Ltd. and Nestlé, have worked hard to improve quality through better farming methods and the introduction of new high-yielding coffee varieties. East Africa's share of the world's specialty-coffee market now stands at 15%, up from 7% in 2012, according to Ecobank, a Pan-African bank.
Back on his plantation in Mityana, Mr. Musoke is upbeat. Harvests have been improving, and he thinks higher coffee-bean yields can offset a minor drop in prices. If the situation were to become unbearable again, he might consider growing other crops. But he thinks he is sticking to his newly recovered farm.
"This plantation holds my future, and from the way things are moving, I don't think I will abandon it again," he says.